In case you weren't aware, Apple's newly launched App Store subscriptions aren't sitting so well with everybody. While the functionality could of course be a boon to services that have struggled getting paying customers, folks who have already been doing just fine, thank you very much, are balking at the new restrictions Apple has imposed. Rhapsody has issued a statement, which says that it's not going to play ball and even levels a bit of a threat: "We will be collaborating with our market peers in determining an appropriate legal and business response to this latest development." The big trouble stems from the fact that Apple requires anybody offering a subscription service to offer that service for the same price or less through Apple. That means you can still sign up folks through your own methods and get all the cash, but if anybody signs up through your app, Apple gets a 30 percent cut. In addition, Apple is no longer allowing applications to include a link to an external site for purchasing, which means vendors will have trouble getting new users to pay them directly instead of using Apple's simple but heavily-taxed option. Rhapsody claims that it can't offer its services at existing prices with Apple grabbing that much of the revenue, and it sounds like Rhapsody will be leaving the App Store soon if an agreement isn't struck.
Of course, this is just the shiny surface of the dirt Apple's new policies have scuffed up, and we might even have an antitrust case on our hands, according to the Wall Street Journal. Check out the more coverage link for more on that, and follow after the break for Rhapsody's statement in full.
Rhapsody is the leading digital music subscription service in the U.S.,with 750,000 subscribers. Music fans can access the service using free apps from any Internet-connected device, be it on an Android, Sonos, Tivo, BlackBerry, iOS or personal computer. Today, Rhapsody subscriptions are available for purchase exclusively via Rhapsody.com.
Rhapsody offers a content-based subscription service that makes millions of tracks available to fans pursuant to longstanding partnerships with thousands of rights holders, all of which then distribute revenues to artists and other creators.
Our philosophy is simple too – an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple's 30 percent monthly fee vs. a typical 2.5 percent credit card fee.
We will continue to allow consumers to sign up at www.rhapsody.com from a smartphone or any other Internet access point, including the Safari browser on the iPhone and iPad. In the meantime, we will be collaborating with our market peers in determining an appropriate legal and business response to this latest development.
